Discuss the following statement Discounting is a core enemy

Discuss the following statement: \"Discounting is a core enemy of inter-generational justice\"

Solution

Discounting oof infinte streams of economic quantities ( consumption,saving, investment, wealth, utilityI in connection with requirements concerning the \" Justice efficiency\" of underlying preferences( in the sapce of such streams). Special attention will be given to the genuine relations forms of between various fforms of discounting and conditions for intergenrational equity.

At the level of an \"operational Plan\" one may ask which evaluation techniques should be recommended in the long time horizon under taking, taking into account not only mathematical elegance and /or tractability, as well as economic criteria, but also questions of an ethichal nature. the acceptation of a specific philosophy increase the chances of suvival in discounting involves determining the method of evaluation, which in turn influences multi-stage(Investment) Strategies and may increase the chances of survival in apossibly largenumber of future generations. How ever, a some what perverse the provocative.

Inspirations derived from psychology suggest the modification of samulesons\'s geometic(exponential ) Discounting paradigm by slowing down the convergence of discount factors( functions) to Zero. At the price of losing the dynamic coherency (of preferrences, as well as sequences of decision ruels and, consequently, Choices), one can obtain a more accurate model of the real behavior of economic agents and aggregates ( which are actually themselves myopic and may will change their own preferrences)

Contermprary systems of axioms protecting evaluations of development paths from the so called dictorship of the present, as well as of the future, are considered. Proposition for modeling preference ( with the use of clasical discount functionals) in the case that the world has random life time(the date of the end of the world is uncertain), assuming that this (EXogenic) variable has poisson distribution.